Ethics, Worldview & Influence
Incentives Drive Behavior
This lesson helps students understand how incentives and limits shape behaviour. They look at what a system rewards and what it makes difficult.
What you will learn
- Recognise that behaviour is shaped by rewards, limits, and choices around a person.
- Explain how incentives and constraints can push people toward certain actions.
- Use incentives and constraints to explain a realistic case.
- Suggest a small system change that could lead to a better outcome.
What happens in this lesson
Chapter 1: Why People Act Differently
Recognise that behaviour is shaped by the incentives and constraints a person is inside, not only by their character.
What you make: A saved note describing one situation where the student has seen the same kind of person behave differently under different incentive structures, and what the underlying incentives seemed to be.
Chapter 2: Incentives And Constraints
Explain how systems push people toward certain actions through the combination of incentives (what is rewarded) and constraints (what is possible).
What you make: A saved note distinguishing between the incentive structure and the constraint structure in one real situation, and explaining how the combination produces the observed behaviour.
Chapter 3: Analyze A Case
Use incentives and constraints to explain a realistic case.
What you make: A saved case analysis describing a specific scenario, naming the incentives (economic, social, moral), the constraints, and the most useful change that would produce a better outcome.
Chapter 4: Incentive Redesign
Propose a small, targeted redesign of an incentive system that would produce a better outcome, and name the specific trade-off.
What you make: A saved incentive redesign statement naming the current system, the unintended effect, the proposed change, and the specific trade-off the change involves.
Chapter 5: Design Incentives For A Real Business
Use incentives and constraints to improve a startup or small business situation.
What you make: A saved business incentive redesign that names the target behaviour, the current incentive bundle, the binding constraint, the likely side effect, and one targeted redesign.
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